The Travels: Economic Boom, Boom, Boom (Post Script)

Monday, January 08, 2007

Economic Boom, Boom, Boom (Post Script)

Last week’s article (Economic Boom, Boom, Boom) dealt with China’s burgeoning trade surplus, created in no small part by its central bank’s artificial suppression of the yuan’s exchange rate.
Bloomberg News reported today that China’s central bank governor, Zhou Xiaochuan, has stated that China may increase the flexibility of the yuan should the country’s trade surplus continue to expand this year.
Here the operative word is “may”.

The United States, specifically Treasury Secretary Henry Paulson, Jr., needs to continue pressure on the Chinese and accept no conditional control of the yuan. The price for using the West’s free markets must be a free Chinese economy.

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